Dairy Crest could be saying au revoir to French spreads division

FTSE 250 dairy foods group Dairy Crest is shaking up its French branded spreads business and considering a possible sale of its St Hubert division.

St Hubert, bought by Dairy Crest in 2007, manufactures Cholegram, Le Fleurier and Omega 3, the top selling spreads in France which account for 36% of the market.

The firm says that since its acquisition, St Hubert has been a successful part of the group and has consistently raised its market share and profitability.

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"However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of its acquisition of St Hubert and it believes that greater value may be generated for shareholders through the consideration of all the available options for St Hubert," the company announced this morning.

A disposal could reduce the group's debt and give it the flexibility to release some proceeds to shareholders, invest in the core business or make further acquisitions of branded businesses in the UK.

"This would further improve Dairy Crest's strong position in the consolidating UK dairy market. Any acquisitions would be synergistic and made within strict financial criteria, as will any decision over the future of St Hubert."

BC